Jan. 25, 2005 — The combined assets of the nation’s exchange-traded funds (ETFs) rose to $226.2 billion at the end of December from $211.7 billion at the end of November, according to the Investment Company Institute (ICI). ETF assets totaled $151.0 billion at the end of 2003.

The number of ETFs in operation totalled 151 at the end of December, two more than in the prior month. Of that total, 102 tracked domestic stock indexes and held assets of $184.0 billion; 43 tracked international/global equity indexes and held assets of $33.6 billion; and six bond index ETFs held assets of $8.5 billion.

The ICI said assets of domestic equity ETFs increased by $10.7 billion in December, and international equity ETF assets increased by $3.3 billion.

In December, the value of all ETF shares issued exceeded that of shares redeemed by $8.7 billion. Equity index ETFs experienced a positive net issuance of $8.2 billion, while bond ETFs witnessed a positive net issuance of $557 million. Gross issuance of all ETFs decreased in December to $19.4 billion from $21.0 billion in November, and redemptions increased to $10.7 billion from $9.6 billion in November.

Net issuance, which is gross issuance minus redemptions, is roughly equivalent to the unit of net new cash flow that is used for conventional mutual funds.

Below is a list of the five largest ETFs.*

ETF

Assets (In billions)

One-Year Returns Through 12/31/04 (%)

S&P Dep Receipts (SPY)

$46.19

+10.7

Nasdaq-100 Trust Ser 1 (QQQQ)

$23.03

+10.5

iShares S&P 500 Index Trust (IVV)

$9.80

+10.8

iShares MSCI EAFE Index Tr (EFA)

$8.73

+18.9

DIAMONDS Trust, Series1 (DIA)

$7.55

+5.0

*Source: Nuveen Investments.

Contact Bob Keane with questions or comments at: bkeane@investmentadvisor.com.